POP Act
- Sponsor
- Sen. Merkley, Jeff [D-OR]
- Committees
- Judiciary Committee (primary)
- Last action
- Sep 17, 2025
Bottom line
The Patients Over Profit Act aims to eliminate conflicts of interest and enhance competition in the healthcare market by preventing health insurers and certain Medicare providers from operating under common ownership.
What it actually does
This bill prohibits any person from directly or indirectly owning, operating, or controlling both a health insurance issuer and certain health care providers (or their management services organizations) that receive Medicare payments. It mandates divestment of one entity within specific timelines (2 years for existing, 1 year for new acquisitions) and grants enforcement powers to federal and state authorities, including the ability to seek injunctive relief and disgorgement of revenue. Furthermore, it applies this prohibition to Medicare Advantage organizations and Medicare Part D sponsors, making non-compliance a basis for contract termination and deeming claims from violating entities as false or fraudulent.
Proponents argue
Proponents argue that vertical integration between health insurers and healthcare providers creates inherent conflicts of interest, leading to anti-competitive practices, inflated costs, and reduced quality of care for patients. They contend that separating these entities will foster a more competitive market, lower healthcare expenditures, and ensure that patient care decisions are not influenced by financial incentives tied to insurance profits.
Opponents contend
Opponents assert that integrated healthcare systems can offer more coordinated care, improve patient outcomes, and achieve efficiencies that ultimately benefit consumers through lower costs and better service. They argue that forced divestment would disrupt existing care models, impose significant financial burdens on healthcare entities, and potentially reduce innovation and patient choice, leading to a less efficient and fragmented healthcare system.
The bill is relatively short and clearly structured, making it accessible for an informed reader to understand its core provisions and implications within a reasonable timeframe.
Section 2(a)
Prohibition on Common Ownership
This provision makes it illegal for any individual or entity to simultaneously own, operate, or control a health insurance issuer and an 'applicable provider' (or a management services organization that contracts with such a provider). An 'applicable provider' is defined as any entity receiving Medicare Part B or Medicare Advantage payments, with specific exclusions for hospitals, critical access hospitals, rural emergency hospitals, durable medical equipment suppliers, and pharmacies.
Supporters argue
Supporters argue this prohibition directly addresses conflicts of interest where insurers might steer patients to their own providers, potentially leading to higher costs and less choice. It aims to restore competition and ensure provider decisions are based solely on patient needs.
Critics contend
Critics contend that this blanket prohibition disregards the benefits of integrated care models, which can offer better coordination, efficiency, and potentially lower administrative costs. They argue it could disrupt patient-provider relationships and reduce innovation.
Tradeoffs
The bill balances the goal of preventing anti-competitive practices and conflicts of interest against the potential disruption to existing integrated care models that some argue offer efficiencies and coordinated patient care.
Section 2(b)
Mandatory Divestment Timelines
This provision sets clear deadlines for entities found in violation of the common ownership prohibition to divest either the applicable provider (or MSO) or the health insurance issuer. For entities already in violation at the time of the Act's enactment, divestment must occur within two years. For any future acquisitions that would create a violation, divestment must happen within one year of the acquisition date.
Section 2(c)
Civil Actions and Enforcement Powers
This section empowers the Inspector General of HHS, the Assistant Attorney General of the DOJ's Antitrust Division, the Federal Trade Commission (FTC), and State Attorneys General to initiate civil actions against violators. Courts can issue orders to cease and desist, mandate divestment, and require disgorgement of any revenue received from healthcare services during the period of violation. Disgorged funds are to be deposited into an FTC-created fund and distributed to serve the healthcare needs of harmed communities.
Section 2(d)
FTC and DOJ Review of Divestitures
This provision requires that all divestments mandated by the Act be reported to the FTC and DOJ, regardless of typical transaction thresholds under the Clayton Act. It also specifies that the divestment period is paused during any required waiting period for regulatory review. Furthermore, the FTC and DOJ are mandated to review the effects of each divestiture and subsequent acquisition on competition, financial viability, and the public interest.
Section 2(g)
Prohibition for Medicare Advantage and Part D Organizations
Beginning January 1, 2026, this provision prohibits the Secretary of HHS from contracting with or making payments to Medicare Advantage (MA) organizations or Medicare Part D sponsors if they violate the common ownership prohibition. MA organizations are required to certify their compliance. Crucially, any claim for payment submitted by an entity in violation of this prohibition is deemed a false or fraudulent claim under federal law, carrying significant penalties.
The bill explicitly excludes hospitals (including critical access and rural emergency hospitals), suppliers of durable medical equipment, prosthetics, orthotics, or supplies, and pharmacies from the definition of an 'applicable provider.' This means the common ownership prohibition does not apply to health insurance issuers owning these specific types of healthcare entities.
Section 2(h)(1)(B) and Section 1857(j)(4)(A)(ii)
Why it matters:While defining scope is standard legislative practice, these specific exclusions significantly narrow the bill's reach, focusing its impact on certain segments of the provider market while leaving others untouched. This could be a strategic carve-out to reduce opposition from powerful industry groups.
Case for: Proponents of these exclusions might argue that they prevent unnecessary disruption to established integrated care models involving hospitals or pharmacies, or that vertical integration in these specific sectors does not pose the same level of anti-competitive risk as in other provider types.
Case against: Critics could contend that these exclusions create significant loopholes, allowing large health systems or pharmacy benefit managers (PBMs) to continue or expand vertical integration with insurers, potentially undermining the bill's overall goal of curbing conflicts of interest and anti-competitive behavior in healthcare.
Estimated impact: These exclusions significantly limit the scope of the bill, focusing its impact primarily on physician practices, clinics, and other non-hospital-based providers. It means that insurer-hospital or insurer-pharmacy common ownership would remain permissible under this Act.
This provision states that any claim for payment from an entity found in violation of the common ownership prohibition under Medicare Advantage (MA) constitutes a 'false or fraudulent claim' for purposes of subchapter III of title 31, United States Code (the False Claims Act).
Section 1857(j)(3) of the Social Security Act, as added by Section 2(g)(1)
Why it matters:While it's a standard legislative technique to cross-reference existing statutes for enforcement, linking non-compliance to the False Claims Act (FCA) is a powerful and potentially punitive measure. Its placement ensures it applies specifically to the MA context without needing to be reiterated in the general enforcement section.
Case for: Proponents argue that designating such claims as false or fraudulent provides an exceptionally strong deterrent against non-compliance within the Medicare Advantage program, ensuring the integrity of federal healthcare spending and protecting beneficiaries from potential conflicts of interest. The FCA allows for significant penalties and whistleblower actions.
Case against: Critics might contend that this is an overly aggressive and disproportionate enforcement tool. They could argue that a technical violation of common ownership, even if unlawful, should not automatically be equated with intentional fraud, which is typically the target of the False Claims Act. This could lead to severe financial repercussions for entities that may have acted without fraudulent intent.
Estimated impact: This provision significantly raises the stakes for Medicare Advantage organizations and their affiliated providers regarding compliance. It exposes them to potential treble damages and per-claim penalties under the False Claims Act, making non-compliance extremely costly.